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Corporate governance and the bankrupt firm: An empirical assessment
Author(s) -
Daily Catherine M.,
Dalton Dan R.
Publication year - 1994
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250150806
Subject(s) - bankruptcy , corporate governance , explanatory power , interdependence , business , accounting , logistic regression , logit , creditor , bankruptcy prediction , economics , econometrics , finance , debt , statistics , political science , law , philosophy , mathematics , epistemology
The incidence of bankruptcy has risen dramatically among firms of all types and sizes in the past decade. Little is known, however, about the effects of alternative governance structures on the propensity of an organization to file Chapter 11 bankruptcy. Relying on logistic regression for periods 5 years and 3 years prior to the bankruptcy, as well as the contemporaneous period, we examine the relationships among independent/interdependent board composition and the structure of CEO/board chairperson positions and the filing of bankruptcy. While controlling for a series of financial indicators and firm size, the results illustrate robust explanatory power for the governance variables for both lagged periods.